Company blames proposed intersection for lost potential tenant at LITH Dominick's

Published: Thursday, Feb. 27, 2014 3:27 p.m. CDT

LAKE IN THE HILLS – The management company that maintains the former Dominick's at the intersection of Randall and Algonquin roads is blaming the proposed continuous flow intersection for a potential retailer declining to locate on the property.

In a letter written to the McHenry County Division of Transportation, Richard Robey, senior vice president of Edgemark Asset Management LLC, said the company had been in discussions about leasing the vacant grocery store to a "major retail store operator."

The prospective tenant then reviewed information about the proposed CFI.

"We are now being told they will be withdrawing their offer to lease and remove themselves from negotiations related to taking over this now abandoned location for one of their stores," Robey wrote. "When pressed to understand why, they made it eminently clear that this decision is due to your 'CFI' proposal."

Robey went on to estimate that the shopping center, the Centre at Lake in the Hills, will lose $1.3 million in rent income in the first year. He also said the loss in the future sale value of the property could exceed $10 million.

Dominick's closed in December after parent company Safeway pulled out of the Chicago area.

Lake in the Hills officials have said two retailers were interested in splitting the Dominick's space, one of which was a furniture retailer.

Robey would neither confirm nor deny that the furniture retailer left the negotiations.

Robey said the CFI would make access to the four shopping centers at the intersection difficult. Some people would have to travel an extra quarter-mile to get to the former Dominick's location.

The proposed CFI also leads people to use service roads, used for loading and unloading products at stores, Robey said.

"It's absurd you want people in the neighborhood driving through the loading-dock area," Robey said.

County Engineer Joseph Korpalski, who is the director of the McHenry County Division of Transportation, said Robey's letter is the first the county has received since it began the phase two engineering for the 3.5-mile Randall Road improvement project.

He said the county received numerous correspondences during the seven-year phase one engineering portion of the project.

Korpalski said part of the phase two process is talking to as many people as possible about the project.

"We look forward to meeting with them to discuss their concerns," Korpalski said. "We want their input."

Korpalski added any intersection the county designs may change access points.

Robey, who has worked in retail shopping centers since 1971, said he was upset when he saw the CFI proposal.

"I've seen what highway changes can do to a retail property," Robey said. "The traffic engineer, in his desire to enhance the smooth flow of traffic, can be more devastating to retail than not."

Robey said he hopes the county comes up with a plan that allows easier access to the retail shopping at the intersection.

"I know we have a lot of traffic at the intersection and how it will grow in the future, I can only imagine," Robey said. "I believe ... any changes they make include in there a way to access into and out of property as to not damage customer access and desireability of being able to get to those properties."

TranSystems is handling the phase two engineering, which includes preparing the project plans that contractors will bid on. The process is expected to take 24 months.

Korpalski said this is an opportunity to re-look at the plans to see if anything may change when it comes to access points to businesses.

"That is part of the process," Korpalski said. "We will be looking at the intersection configuration and impacts on the access points."